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US imported beef prices continue to rise
02 February 2017
US Imported beef prices continue to edge higher, as a result of extremely limited spot supplies and strong demand from sizeable end users.
In the weekly update commissioned by MLA, the Steiner Consulting Group reported that the imported 90CL beef indicator increased 1US¢ from week-ago levels, to 202.5US¢/lb CIF (up 3A¢, to 589.75A¢/kg CIF).
Growing demand for ground beef in the US is helping to push imported prices higher, combined with ongoing supply constraints from Australia and New Zealand. Steiner Consulting Group reports that lower beef prices have encouraged fast food marketers to focus more funding on beef promotions, contributing to the improvement in beef demand. Market participants also note an improvement in demand from the foodservice sector.
Australian and New Zealand beef shipments to the US are both down comparable to the same period last year; Steiner Consulting Group expects Australian beef shipments to the US in January to be 40% lower than a year ago. Seasonally, New Zealand bull slaughter peaks in January which is likely to remain the case this year, despite slaughter so far this marketing year falling 14%. However, Steiner Consulting Group suggests that bull slaughter could be higher year-on-year during February and March as a result of the delayed start to the season.
A strong start to 2017 for the Australian dollar has also made the US market less attractive, with reports suggesting Australian packers are increasingly seeing better offers coming from the Asian markets. The Australian dollar is currently 3US¢ higher than at the close of 2016 – currently trading at 75US¢.
US cattle inventories continue to expand, with the calf crop in 2017 estimated to be 3% higher year-on-year, ultimately leading to a greater availability of domestic beef supplies in 2018. Compared to last year, the US beef cow herd is currently estimated to be 3.5% higher. The rising domestic beef production base implies higher US beef supplies in 2018 and 2019 – which is likely to put pressure on the imported beef market.
